Crypto Community Scoffs as SEC Chairman Gives Savings Advice for Students
The US Securities and Exchange Commission (SEC) Chairman Gary Gensler has been offering American college students savings advice – and, in the crypto community at least, it has gone down like a lead balloon.
Gensler has already bashed stablecoins this week, equating them to “poker chips at casino tables” and hinting that more crypto regulation is on its way in the United States. The SEC has also reportedly threatened to sue the crypto exchange Coinbase if it launches a USD Coin (USDC)-related lending service.
So many were stunned when the SEC boss followed up by posting some financial advice for students to his Twitter account.
He suggested that students set aside as little as USD 5 per week – starting “early” and “earn maybe 8%” on the money they put aside.
This suggestion in particular was met with incredulity and was perhaps mistimed: the Federal Reserve yesterday announced that it was holding its interest rates near zero.
Matthew Graham, the CEO of Sino Global Capital, challenged “anyone in crypto” to watch Gensler’s post “without laughing.”
A respondent agreed, noting that regulators had made it clear they “won’t allow” student (or anyone else for that matter” to “lend in crypto.” Instead, the SEC appeared to be suggesting that students “just take the rate the bank gives you – 0.08% [on] good days.”
"We had such high hopes for him when he began his tenure, but by now our dreams of having a levelheaded and knowledgeable financial regulator in the U.S. turned out to be nothing more than a pipe dream. This video clearly shows just how out of touch with reality our new SEC chair is while he sits in his ivory tower," Mati Greenspan, Founder and CEO of Quantum Economics, wrote in his newsletter today.
"Which financial institution offers 8% for a savings account?! In what world is $130,000 enough to retire on? It's not nearly enough today, and with the dramatic devaluation of the U.S. dollar over time, it certainly won't be in 30 or 40 years from now...that is if the greenback event exists at that point," Greenspan added.
Others pointed out the irony of a “millionaire” like Gensler, whose stellar private sector career saw him rise to the lofty position of co-head of finance at Goldman Sachs, where he was responsible for global controllers and treasury-related matters.
One of Goldman Sachs’ highest-yielding saving accounts offers 0.5% annual percentage yield. Competitors offer very similar or even lower rates.
Ryan Selkis, the CEO of Messari, earlier this week claimed that regulators (one withness claimed were from the SEC) had “gatecrashed” a Messari event to serve a speaker with a “subpoena” just before they took to the stage. Predictably, then, Selkis did not pull any punches with his own comment – suggesting that Gensler’s millionaire status had left him out of touch with ordinary folk’s saving options.
Popular crypto trader @DegenSpartan, meanwhile, addressed more fundamental matters, questioning “whether these kids should even be legally able to take on tens of thousands of student debt to fund some degree in art or gender studies or whatever” instead of asking them to save USD 5 a week.
Others questioned why gambling was legal, yet the SEC appeared so keen to restrict crypto-powered lending.
On Reddit, posters called Gensler a “clown,” with one writing:
“It seems Gensler has forgotten what it is like being a student.”
Another mused that Gensler “probably never lived off ramen with four roommates.”
And another Redditor wrote, “Old men should not be commenting on young people’s business.” Gensler turns 63 next month.
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(Updated at 16:05 UTC with comments by Mati Greenspan.)